Here we will continue delving into the top mistakes made on engagement letters, and the steps you can take to improve your engagement letters. To catch up, check out part one here.

Tip 6: Establish Expectations

In the engagement letter, it is a good idea to establish what the client can expect from your relationship. In terms of communication, you ought to explain how it will typically be handled, how often, how a clients’ communication will be returned (via phone/email), and when/how to expect filings, letters, and documents to be delivered.

It is also good to establish the decision-making authority in the engagement letter. This could entail: short extensions to deadlines as needed, the right to pursue whatever steps necessary for an expressed purpose (within reason), and how issues should be handled in correspondence, pleadings, or court matters.

Additionally, it’s smart to make an explicit statement regarding the inevitable uncertainty of results. This way, by stating that there’s, “no guarantee in success,” you can protect yourself from claims that you promised a certain result.

Always avoid language that operates as a superlative or definitive statement because this language can be take as an assumption of a higher standard of care in the case that your relationship with your client sours.

Finally, it is smart to establish responsible use of email and social media in the engagement letter. In this way, you’ll be able to conduct your work in the most efficient manner, while also protecting yourself.

Tip 7: Clearly State the Clients’ Expectations

It’s essential that you outline the responsibilities of your client before you commence your working relationship.

You should require full disclosure of all facts and documents on their behalf. This will help you in conducting your risk assessment of working with a particular client. This could also save you time and money, in the case that your client reveals unpleasant information in an untimely manner, such as during a trial. Putting the requisite of truthfulness in writing will help shield you from the difficulties that could potentially arise in this situation.

You should also necessitate your clients’ cooperation in the engagement letters. They should agree to keeping their appointments with you and making themselves available for meetings, hearings, trials, depositions, etc.

You should explicate the clients’ duties to keep their contact information updated and to keep your staff informed of any changes in structure or ownership. They should also agree to pay invoices and you should establish the termination of your partnership should they elect not do so.

Finally, if necessary, you should, in writing, establish your clients’ duty to preserve evidence. This could save your firm from a malpractice suit and your client from court-imposed sanctions should some piece of evidence be needed and be unable to be obtained.

Tip 8: Establish the Terms of Termination and Withdrawal

You should, outright, state that a client may terminate a partnership at any time. You should also explain when you’re allowed to terminate a relationship. Try to establish the conditions in as clearly as possible (e.g. the lawyer may withdraw for any reason; 1. if the client fails to cooperate or communicate, 2. If the client fails to pay 3. If the client threatens to lie, etc.)

Be sure to check with your jurisdiction regarding its rules on how a withdrawal can and should happen.

Finally, establish when a relationship should be deemed to have ended. This will help determine when your current client becomes a former client for conflict purposes.

Tip 9: Clarify Document and File Retention Procedures

You should use the engagement letter to explain how a client’s documents will be handled while you are working together and after the matter has concluded. You should clearly state what will happen to the original documents when the matter is over and how long your firm will maintain the client’s file.

It is important to consider the rules of your jurisdiction regarding the required duration of retaining a client’s file, but you should also consider other potential circumstances that could impact how long you want to keep a client’s file; for example, the potential of working together in the future.

Tip 10: Discuss Dispute Resolution

When possible, you should consider incorporating alternative dispute resolution provisions in your engagement letter to require mediation and/or arbitration to resolve any disputes.

These provisions can be advantageous in that mediation and arbitration are confidential procedures that can be handled internally and privately. Additionally, discovery is usually more limited in arbitration, which could help reduce the cost and the time spent on litigation. There are also fewer chances to appeal in arbitrations.

It is important to consider what your jurisdiction says regarding arbitration and mediation. You may, based on jurisdiction, need to distinguish between the arbitration of fee disputes and malpractice claims. Furthermore, some jurisdictions simply prohibit or do not approve of the inclusion of arbitration provisions in the engagement letter. Others say that these provisions are not enforceable, but the clients must be informed of the consequences of such a provision. Meanwhile, other courts have upheld arbitration provisions without requiring the disclosure of potential consequences. Clearly there is a good amount of variability, so it is essential to check with your jurisdiction.

Conclusion

Clearly, a lot goes into drafting an engagement letter, but there are circumstances where you’re simply replicating the same engagement letter with minor modifications. With that in mind, you should consider ClientSide’s Form functionality, that enables you to quickly prepare your forms using a custom template created to suit your needs. Imagine sending your engagement letter out with just a few clicks. We’d love for you to see for yourself; click here to start your free trial today!